Find the outstanding balance due at the end of the credit period. Scotty purchased merchandise with a list price of $235,000 with an invoice date of February 10th. He receives the goods on February 15. He is offered a 20/5/5 trade discount and terms of sale 3/15,1/25, n60. He makes a $60,000 partial payment on February 18 and a second partial payment of $40,000 on March 1
Find the outstanding balance due at the end of the credit period.
Scotty purchased merchandise with a list price of $235,000 with an invoice date of February 10th. He receives the goods on February 15. He is offered a 20/5/5 trade discount and terms of sale 3/15,1/25, n60. He makes a $60,000 partial payment on February 18 and a second partial payment of $40,000 on March 1
Meaning of Trade Discount : -
Trade discount is a reduction of a list price and is usually stated as a percent of the list price.
Trade discounts are used by manufacturers, distributors, and wholesalers as pricing tools for several reasons, such as to (a) determine different prices for different levels of the supply chain; (b) communicate changes in prices; (c) enable changes in prices.
A manufacturer may offer two or more discounts to different members of the supply chain. If a list price is subject to two or more discounts, these discounts are called a discount series.
The above question mentions the Discount Series offered by dealer to Scotty. 20%/ 5% /5% which has been derived below in Step 2.
The balance left after series discount is known as Net Price.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
